[Interview Article] Delta Air Lines seeks to tap growing US-Korea route demand
Delta Air Lines seeks to tap growing US-Korea route demand
BY SEO JI-EUN, Korea
JoongAng Daily - For Delta Air Lines, Korea is a crucial Asian hub connecting
two continents seamlessly, and the demand for U.S-Korea routes will likely keep
increasing thanks to active investments between the two countries, says Peter
Carter, the Atlanta-based airline’s executive vice president of external
affairs. This is made
possible through Delta's joint venture partnership with Korean Air, a vital
component of Delta's endeavor to strengthen its presence in the Asia-Pacific
region. Today, the two
airlines connect more than 290 destinations in the Americas and over 80
destinations in Asia in 44 countries from the combined network, including
direct flights to 13 U.S. cities. Geographically,
Korea's favorable location as the first point of entry for North American
travelers to Asia, facilitated by Incheon International Airport, enhances its
appeal. Korea's cultural influence also continues to expand worldwide, while
Korean businesses make substantial inroads into the United States. In fact, in
Delta's home state of Georgia, Korea has emerged as the largest overseas
investor, with substantial investments in various sectors, including electric
vehicle manufacturing and renewable energy. Incheon
International Airport, with its excellent reputation and efficient layover
system, is considered another critical component of Korea's significance in
Delta's growth strategy. As one of the world's premier airports, Terminal 2
serves as the dedicated home for the Delta-Korean Air joint venture
partnership, offering seamless connections with low connection times that are
as short as 45 minutes. Celebrating the
fifth anniversary of the Delta-Korean Air joint venture, The Korea JoongAng
Daily had an exclusive interview with Carter in Seoul on Thursday, where he
shared Delta's plans and their commitment to expanding their presence in Korea. Below are edited
excerpts from the interview. Q. Can you provide
an overview of Delta Air Lines’ operation in Korea?A. We are the
largest U.S. airline serving Korea, and that's mainly due to our joint venture
with Korean Air. Ten years ago, we only served the Incheon-Detroit route. But
since partnering with Korean Air, we have expanded our services to three more
cities: Atlanta, Minneapolis, and Seattle. Korean Air has also expanded its
footprint as well, adding Boston as a destination. We've also
collaborated with both governments. One exciting pilot project we are working
on is when a passenger flying with Delta checks in a bag at Incheon and is
transferring at Atlanta, they do not have to reclaim that bag as they are
transiting. Instead, the bag will be checked through to wherever their final
destination is. We have also
established a joint service desk at the airport. A Korean Air customer
purchasing a ticket for a Delta flight can approach the Korean Air desk and
talk to a Korean Air gate agent, and vice versa. We want to make sure that
there's a single source of truth and information and resolve customer concerns
promptly, particularly during irregular operations such as flight cancellations
or rerouting due to weather events. Today we celebrate
the five-year anniversary of the joint venture. We are at a place where,
together with Korean Air, we have served and connected over 7 million
passengers over these years. We have a bunch of projects and are about 70
percent there. But it is like painting the Forth Bridge — we will always find
more ways to make the experience seamless, including language support, and
ultimately, we want to have zero friction for our customers. Q. What key factors led
Delta Air Lines to choose Korean Air as a strategic partner for the airline
partnership?A. The one thing that
impressed us about Korean Air is its deep commitment to serving customers. The
customer experience on Korean Air is almost without an equal in the industry.
The shared value of prioritizing customer service, safety, cleanliness,
punctuality, and hospitality made them a great partner. The great thing about a
relationship like this is the reciprocal learning we engage in. Another crucial
factor is Incheon’s strategic position as a prime connectivity hub for Asia,
with Korean Air serving diverse destinations from Incheon. There are over 2,000
passengers connecting through Incheon International Airport every day, which is
tremendous, and also a growth of over 40 percent compared to five years ago.
The airline industry is a business of efficient networks, and the hub is the
way that efficiency is achieved with a connecting time of 45 minutes, which is
amazing. This allows passengers to get to where they want to go as quickly as
they can, and that is a huge customer benefit. Q. How do you view
Korea’s position within Delta’s global growth strategy?A. It is remarkable how
much direct foreign investment there is from Korea to the United States. In our home state of
Georgia, for instance, there is $12.5 billion worth of projects, including
Hyundai Motor looking to build a battery manufacturing plant, Hanwha Q Cells’
solar panel factories, and Hyundai Motor and SK On’s joint investment for an EV
plant. Even the Korean president has traveled to Atlanta to meet with our
governor. We're not seeing the same level of direct foreign investment from
Japan. What is remarkable
is that the Korean car manufacturers have put a flag in the ground in the U.S. in
a way that has elevated their presence and garnered more appreciation and
attention than Japanese car manufacturers, which the opposite used to be true
in the U.S. There's a real transformation, and it reflects Korea’s leadership
in technology. When I come to Seoul, I'll see it here, and six months, eight
months or a year later, I'll see it in the United States. And that's something
the country should take great pride in. Q. Reflecting on
Delta's merger with Northwest Airlines in 2008, what key lessons or insights
can Delta share regarding the challenges and opportunities of a major airline
merger? How do you envision the potential merger between Korean Air and Asiana
Airlines impacting the existing joint venture?A. Our experience with
the merger of Delta and Northwest Airlines was truly a game changer for Delta.
It provided us with a greater scope and scale as an operation, leveraging the
strengths of both companies. Mergers, especially
in the airline industry, require a ton of work. But when executed well, as
demonstrated by Delta and Northwest, they can provide enormous benefits to
consumers such as expanded service coverage. If the merger
between Korean Air and Asiana Airlines goes through, it will provide consumers
with a wider range of choices. While the U.S.
Justice Department is famously critical of any business combinations, I
understand that the Korean government has been supportive of this merger, which
is incredibly important. And something that I'm sure the U.S. government is
aware of, too. I think that's all positive, and hope that the Justice
Department doesn't file a lawsuit. Regulators have
commonly asked airlines to provide remedies during mergers as a common tool to
address competition concerns. And you would hope that regulators are able to
see the incredible associated consumer benefits as well. So I wish them all the
best of luck. Q. Regarding Delta Air
Lines' recent legal dispute on flight caps at Amsterdam Airport Schiphol, what
advice can you provide for dealing with similar environmental challenges in
different regions worldwide, such as the construction of another airport on
Jeju Island in Korea?A. I'm not familiar
with the specific situation on Jeju Island, but addressing concerns about
airport locations and their impact on local communities should ideally involve
all stakeholders in finding the best solution. The long-term interests of an
area could be taken into account. Our belief at Delta
is that individuals should not have to choose between saving the world and exploring
it, but they should be able to do both. The global agreement
and framework for the industry exist because countries recognize the importance
of global connectivity and open skies. Without a global compact, local
authorities, like the Schiphol airport authority, would impose their own narrow
and self-interested restrictions on airlines. Global standards and
organizations like the International Air Transport Association are necessary to
ensure safety and efficiency in the airline industry. Our view is that capping
the number of movements on a local level is a violation of the open skies and
bilateral agreements, which makes travel challenging. We are committed to
becoming a net-zero airline by 2050, and one of Delta’s key strategies is
upgrading our aircraft to larger, more fuel-efficient aircraft that burn 25
percent less fuel than smaller, less efficient ones. But we cannot do that
unless we are operating in an efficient manner and are not hindered by local
restrictions that limit our ability to fly to certain destinations. Source: https://koreajoongangdaily.joins.com/2023/06/07/business/industry/Delta-Air-Lines-interview-Peter-Carter/20230607060007777.html
2023.06.09
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